Select Committee on Science and Technology Appendices to the Minutes of Evidence



Memorandum submitted by AEGON UK

  1.  AEGON UK is a life insurance and pensions organisation operating within UK, inter alia, through its main risk-product issuing subsidiaries Scottish Equitable plc of Edinburgh and the Guardian life insurance and pensions businesses of Lytham, Lancashire. AEGON UK is in turn a wholly owned subsidiary of AEGON nv of the Netherlands. UK executive management has freedom to pursue any legal course of action that they deem appropriate to the proper functioning of the business and in the best interests of the general body of its policyholders.

  2.  This memorandum is written in response to Mr Geoffrey Farrar's invitation of 11 January 2001 for Scottish Equitable plc to explain what we believe to be the significant issues surrounding the use of genetic test results by insurance companies. Because of the common interest of Scottish Equitable plc and the other subsidiaries we have included in this response all of AEGON subsidiaries that issue policies in the UK covering against death, critical illness or sickness risks.

 (i)   Our policy regarding the use of genetic test results and the reasons for it

  3.  It is our shared corporate philosophy that—in underwriting risks applied for by persons at a time, of a kind and for an amount of their own choosing—an insurer should not be excluded from information already known to the life to be insured that is relevant to a proper assessment of the risk to be borne.

  4.  In relation to genetics there are three reasons to do with risk control for this philosophy:

    (a)  the information may concern a genetic susceptibility to future disease and/or to shortened life expectation which must influence an insurer's assessment of the risk that is to be insured;

    (b)  knowledge of the implications may influence the individual to put in place insurance which he or she may not otherwise have done; and

    (c)  if the contract term extends through the typical years of onset of the condition the insurance will be against the certainty of an event that rather than against the possibility of an event (whilst paying a premium based on the mere possibility if the insurer is unable to have access to the relevant information).

  5.  In the absence of genetic information it is possible to form an estimate of an additional risk by use of "family history". If an individual has been tested at his own behest by use of an appropriate, reliable and approved test and is found to be negative for the genetic defect then we agree that the individual is not at risk for that condition and if we are permitted the use of existing genetic test results we would agree that an extra premium based on a family history of the condition should not be charged.

  6.  We agree that insurers should not require applicants to be tested for genetic mutations.

 (ii)   What scientific research have you based your decisions on and how reliable do you consider it to be?

  7.  ABI membership has had, and continues to have, the benefit of the expert advice of ABI's genetics adviser. AEGON UK is delighted that the GAIC has been set up to examine a rigorous case for insurers' use of existing predictive tests results for each of certain severe medical conditions which result from genetic mutation. A separate case is presented for each kind of insurance contract for which the existence of the genetic mutation in an asymptomatic individual presents an additional cost at a level that it is not reasonable (with the agreement of GAIC) to absorb into the standard rate.

  8.  Each case presented to GAIC is based on published professional genetics research material.

  9.  The very few decisions that have had to be made by us until now have been made in accordance with the published (by ABI to members) or specific advice of ABI's genetics adviser in accordance with ABI's Genetics Code of Practice.

 (iii)   The use by us of test results now and in the future

  10.  We feel that it is important for the life assurance industry to be able to react sensibly and appropriately to developments as they occur. We are conscious that each of us is merely the expression of our genes and that many, or all, of us will carry defective genes but will suffer no harm—or if we do it may be quite unclear as to what gene or genes have interacted with what trigger or triggers to precipitate a significant medical condition.

  11.  The less likely that a mutation is to express itself the less likely it is that an individual seeking insurance will have been tested predictively beforehand and the less meaning any such test would have in reality for the individual or for an insurer. It may be that if a clear gene combination giving rise to significant mortality or morbidity were found—with or without an identifiable trigger such that a predictive test became available an individual who had been tested (a) will presumably be aware of the possibility of future illness and (b) how to reduce its likelihood by avoidance of the trigger circumstances—and (c) they would also know if they were taking steps to avoid or exacerbate the risk. If such a scenario were to arise in future the best-placed body to assess the appropriateness of insurers having access to test results already known to applicants must be GAIC.

 (iv)   How effective do you feel the current regulatory system is?

  12.  We feel that a sound system is evolving around ABI and GAIC. It has to be in the interests of insurers and the insuring public that there is "nothing to hide" and that underwriting practice is fair to applicants and insurers and seen to be fair in the context of what is voluntary, on application—not compulsory—life assurance.

19 January 2001

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